LOUIS CHAPMAN, PLAINTIFF AND APPELLEE, VS. GIL GARCIA ET AL., DEFENDANTS. ASUNCION VIUDA DE SANZ, DEFENDANT AND APPELLANT.

“In view of the foregoing considerations,
dismissing the counterclaim presented by the defendant Asuncion Viuda
de Sanz, judgment is rendered ordering her to pay to the plaintiff the
sum of one thousand five hundred pesos (P1,500), with the legal
interest of six percent (6%) per annum thereon from December 28, 1930,
until fully paid, and to pay the costs of the suit. So ordered.”

As ground of her appeal, the appellant assigns six alleged errors as committed by the court a quo in its judgment in question, which will be discussed in the course of this decision.

The following undisputed facts have been proven at the trial, to wit:

The plaintiff Louis Chapman was one of the organizers and principal
partners of the Philippine Lumber Co., a partnership duly organized
under the laws of this country, with principal office in the
municipality of Tacloban, Province of Leyte. The other
partners-organizers were Jesus Sanz, Gil Garcia, Santiago Martinez and
Adela Allen. The latter two withdrew later, leaving Jesus Sanz, Gil
Garcia and the plaintiff herein as partners. On or about November
1,1927, Chapman sold all his participation in the business to his
co-partners Gil Garcia and Jesus Sanz for the sum of P10,000.
Immediately after Chapman’s withdrawal, a liquidation of the
partnership’s business, covering a period of one year up to said date,
November 1, 1927, was made, and the sum of P1,500 was declared as the
plaintiff Chapman’s participation in the profits realized. Said sum was
credited to him and to that effect the manager Gil Garcia issued to him
the document Exhibit A, dated November 2,1927.

Said plaintiff, who is a building contractor, used to obtain lumber
on credit from the Philippine Lumber Co., for use in his private
contracts. He did not keep a record of his transactions nor any copy of
the liquidation of his accounts or debts.

By reason of the death, of Jesus Sanz, which took place in
February, 1933, the partnership Philippine Lumber Co. was dissolved on
September 21st of said year, while this action was pending. By virtue
of an agreement which was made to appear in the contract of
dissolution, the herein defendant and appellant Asuncion Viuda de Sanz,
in her own name and as administratrix of the estate of her deceased
husband Jesus Sanz, acquired all the rights and assumed all the
obligations of the Philippine Lumber Co. and, as such, she admitted the
plaintiff Louis Chapman’s claim for the sum of P1,500, appearing in the
document Exhibit A, to be true. She alleged, however, that Chapman, in
turn, was indebted to her in the sum of P3,109.77, representing the
still unpaid value of lumber which said plaintiff had obtained on
credit from the Philippine Lumber Co. on different dates, as evidenced
by the books and invoices Exhibits 1, 2 and 3.

In support of their counterclaim the defendants tried to prove that
from. January 1, 1927, to January 1, 1928, the plaintiff Louis Chapman
continued to make transactions on credit with the Philippine Lumber
Co., his indebtedness thereto having reached the sum of P3,312.90
(Exhibit 1, page 3). On November 2, 1927, the plaintiff bought on
credit lumber worth P53.28 from said company, and on the 23d of said
month and year he contracted with it a debt of P243.76, representing
the freight of lumber taken by him, as evidenced by the book Exhibit 1,
On January 3, 1928, he contracted another debt in the sum of P140
(Exhibit 1). It appears from the cashbook Exhibit 2, page 167, that on
October 6, 1927, the plaintiff was credited with the sum of P1,500 as
his share in the company’sprofits corresponding to the year 1926. On
December 7, 1927, the plaintiff himself paid the sum of P1,000 on
account of his debt, as shown on page 192 of said cashbook Exhibit 2
and on page 3 of the daybook Exhibit 1. The entries in the above-stated
books Exhibits 1 and 2 have been made by the bookkeeper Basilio Moreto,
whose handwriting has been identified by the witness Patrido Coloma. On
January 3, 1927, the plaintiff took lumber valued at P47.68, as shown
by invoice No. 910 (Exhibit 3) and on page 1 of Exhibit 1. The other
books and invoices of the company disappeared when an internal revenue
agent took possession thereof to investigate alleged anomalies and when
the receiver appointed by the court was taking them from one place to
another.

The plaintiff, in turn, tried to prove that when he withdrew from
the company and was credited with the Bum of P1,500 as his share in the
profits thereof on November 2, 1927 (Exhibit A), he had already settled
all his accounts therewith and, therefore, he no longer owed anything
on said date; that from said date, November 2, 1927, he had no
transaction whatsoever with the Philippine Lumber Co.; that his
commercial transactions with the company had ceased three months prior
to said date, November 2, 1927; that Exhibit A was delivered to him
after the liquidation of all his accounts; that the books of the
company were kept in a very irregular manner, some of the transaction
having been entered therein about five to ten months after the true
date thereof, for which reason he became disgusted with his copartners,
causing his withdrawal from the partnership; that the entry of November
2, 1927, in the sum of P53.28, under invoice No. 4014, is incorrect;
that he did not pay any amount of P1,000 on account of his debt on
December 7, 1927, but that said amount must have been what Jesus Sanz
owed him some months prior to November 2, 1927, evidenced by a
promissory note returned to the latter by the plaintiff on condition
that said Sanz would credit said debt in the company’s books; that the
above-stated entries of P53.28 and P1,000 were made about three to
seven months after the respective transactions; that when he returned
the promissory note in question to Sanz, he already suspected the
irregularity of the entries; that he had been asking for a liquidation
of his account with the company but his copartners did not gratify him,
and this was one of the reasons for his withdrawal.

The appellant’s first assignment of alleged error is well founded
because, as seen in the statement of undisputed facts established
during the trial, the plaintiff Louis Chapman sold all his
participation in the Philippine Lumber Co. to his copartners Gil Garcia
and Jesus Sanz, and not to said partnership as held by the court a quo in its judgment.

The second question to be decided, which enabraces the questions
raised by the appellant in her second and third assignments of error,
is that stated in the fourth assignment of alleged error, consisting
in; whether or not the court a quo erred in not sustaining
the counterclaim of the Philippine Lumber Co. and Asuncion Vda. de
Sanz, and in not ordering the plaintiff-appellee to pay to said
defendant-appellant the sum of P3,312.90 representing the amount of her
counterclaim. It will be seen that the counterclaim of the
defendant-appellant is based solely upon the debit and credit accounts
appearing in the books Exhibits 1 and 2, which are the daybook and
cashbook, respectively, of the Philippine Lumber Co. The
plaintiff-appellee questions the admissibility of said books as
evidence inasmuch as, according to him, the entries therein are not
duly authenticated by the same bookkeeper who wrote them. In order that
the account books of a merchant may be admissible as evidence of their
contents, it is necessary that they have been kept in accordance with
the provisions of the Code of Commerce (art. 38), and their
admissibility is subject to the rules laid down in article 48 of said
Code relative to the graduation of the weight of evidence thereof. In
the case at bar, the evidence shows that the daybook Exhibit 1 has not
been kept in accordance with the provisions of article 38 of said Code,
inasmuch as the alleged accounts of the plaintiff were not entered day
by day but some of them were entered about five to ten months after the
respective transactions, according to the testimony of the appellant’s
witness himself, named Patrick) Coloma. Furthermore, the record shows
that the bookkeeper who kept the accounts was one Basilio Moreto and he
has not. been presented as a witness, nor was his deposition taken, to
testify on the certainty and correctness of the plaintiff’s accounts
appearing therein. Under these circumstances, the daybook and cashbook,
Exhibits 1 and 2, respectively, presented by the defendant-appellant,
are not competent and, therefore, are not admissible as evidence for
lack of authentication (F. M. Yap Tico & Co. vs. Lopez
Vito, 49 Phil., 61).. The fact that the entry appearing on page 1 of
Exhibit 1 coincides with the amount of invoice No. 910 of Exhibit 3,
dated January 3, 1927, is no evidence that may give rise even to the
presumption that the entries appearing in the daybook Exhibit 1 were
made on the same day that each transaction took place.

The plaintiff-appellee admits that he had been taking lumber on
credit from the Philippine Lumber Co. but ha alleges that three months
prior to the liquidation of November 2, 1927, he had already 3topped
having transactions with the company in question and had paid the
entire debt. The plaintiff-appellee’s claim is based upon the
liquidationvoucher Exhibit A which is expressly admitted by the
defendant-appellant. A liquidation presupposes the settlement and
adjustment of all accounts had between the parties prior thereto and is
competent evidence at the trial, unless it can be satisfactorily proven
that some items have been omitted therein either expressly or
involuntarily, which does not appear in this case.

Wherefore, the appealed judgment is affirmed, with coats to the appellant. So ordered.

Avancena, C. J., Abad Santos, Imperial, Diaz, Laurel, and Concepcion, JJ., concur.

Judgment affirmed.

DECISION ON MOTION FOR RECONSIDERATION

October 5, 1937

VILLA-REAL, J.:

This is a motion filed by the defendant-appellant Asuncion Viuda de
Sanz praying, for the reasons alleged therein. that the decision of
this court promulgated on August 24, 1937, affirming that of the lower
court, be reconsidered, and that it be set aside by reversing the
decision appealed from.

Except that part referring to the manner in which the credit of the
plaintiff-appellee Louis Chapman should be made, as stated in the
memorandum Exhibit A, the motion raises the same questions of fact
raised by the defendant-appellant in her brief, and adduces the same
arguments in. support of her contention, and this court finds no
sufficient reason to alter its findings relative to said questions of
fact.

With respect to the manner in which the payment of the
plaintiff-appellee’s credit should be made, the memorandum Exhibit A
reads as follows:

“I declare that Mr. Louis Chapman has a credit with
the Philippine Lumber Co. in the sum of one thousand five hundred pesos
(P1,500) worth of lumber at the prices usually charged him heretofore.

It will be seen that the credit of P1,500 acknowledged in favor of
the plaintiff-appellee is in lumber at the prices charged him up to the
date of said document. The defendant-appellant, as the person who has
acquired the rights and obligations of the Philippine Lumber Co., is
only obliged to pay the P1,500 in lumber. In her brief the appellant
assigned as alleged error committed in the appealed judgment her having
been ordered to pay to the plaintiff-appellee in money and not in
lumber.

Considering the motion well founded in so far a8 the manner of
payment of the credit is concerned, it is ordered that the dispositive
part of the decision of this court rendered in this case be amended so
as to read as follows:

“Wherefore, the appealed judgment is modified and
the defendant Asuncion Viuda de Sanz is ordered to pay to the plaintiff
Louis Chapman the sum of P1,500 in lumber at the price established in
the memorandum Exhibit A, with the legal interest thereon from the date
of the filing of the complaint, until fully paid, with costs to the
appellant. So ordered.”

Avancena, C. J., Abad Santos, Imperial, Diaz, Laurel, and Concepcion, JJ., concur.